Archive for October, 2008

A Lyrical Soul – T.J.’s Student Loan Story

October 31, 2008 Leave a comment

What sort of person becomes a composer?  One thinks of a small, be-suited child, perhaps wearing a bowtie, a bit out of place and yet mature beyond his years as he sits eating dinner at a long, dark, candle lit dinner table in Manhattan.   Rigoletto plays in the background as wine glasses clink and his parents discuss literature and art before launching into the pros and cons of the various preschools on the upper eastside.     

                T.J. Jamison* was not your typical composer.  Born in North Dakota, the third of four children, he did have a penchant for sweater vests, but the similarities ended there.  T.J. ’s father owned a small family farm; his mother was a housewife.  When T.J.  was five, his father had a falling out with his uncle, and he sold his share in the farm and went to Minneapolis to start a new life.  He got a job in a hardware store and a year later, he moved the rest of the family to a small home in a nice neighborhood that he bought with the proceeds from the farm sale.  Read more…

Categories: Stories Tags:

Sallie Mae No Longer Offering Consolidation Loans

October 31, 2008 1 comment

I was bemoaning my five loan payments to a co-worker today when she mentioned that since the Fed has recently cut the interest rate again, it would be a good time to try consolidating my loans.  I had tried to consolidate with CitiBank in the past, but they turned me down because of complicated paperwork related reasons that, frankly, I didn’t understand.  My co-worker recommended Sallie Mae so I thought, what the heck, I’ll check it out.

I went to their web-site, but I couldn’t find anything on consolidation loans.  “That’s odd,” I thought, and tried Googling “Sallie Mae consolidation loan” instead.  Low and behold, I came across this page, somewhat hidden on their web-site.  An excerpt:

Thank you for your interest in Sallie Mae, the nation’s leading provider of saving- and paying-for-college programs. Severe legislative cuts made by Congress made federal student loan consolidation uneconomical. This, combined with the credit market deterioration, has caused us to suspend participation in the federal consolidation loan program.

I did some more searching and found an interesting Washington Post article covering the development, which happened in April.  They’ve also started charging application fees for applying for federal loans.

Categories: News Tags: ,

Project on Student Debt Releases New Report

October 31, 2008 Leave a comment

The Project on Student Debt has released its third annual report on student loan debt.  The report shows the average amount of student debt at the national, state, and individual college level.  One interesting finding: Average debt for graduates of 4-year colleges (both private and public) increased 6% from 2006 to 2007. 

Read the report here.

Obama v. McCain on Student Loans

October 31, 2008 1 comment

The New York Times had an interesting article on Oct. 29th on the differences between Obama and McCain’s positions on student loans.  To summarize:

Obama’s Plan: $4,000 tax credit for tuition in return for 100 hours of community service (available to all students, even those whose families do not make enough to pay taxes); Add $1.5 billion to the Pell Grant program

McCain’s Plan: Publicly encourage colleges to slow tuition increases; Improve the student loan market to add competion and more flexible payment options; Increase Pell Grant so that it funds the cost of in-state tuition at public universities

Honestly, I like both of their plans.  The article has some pretty good analysis (read: better than I could do, so I’m not going to try) on the strengths and weaknesses of each.

Side note: The article also reports that the Obamas just finished paying off their student loans in 2004. Yikes.

Categories: Policy Tags: , ,

My Student Loan Story – Part II

October 30, 2008 2 comments

I couldn’t afford the expensive test prep. courses for the LSAT so, while working as a barista in the cafe section of a Barnes & Noble, I devised my own study method, reading books and working out logic puzzles on my breaks.  I wound up doing well, but because I took the test in February, I had to wait until September to apply and then I had to wait several more months to be accepted anywhere.  My loans were on forebearance the whole time.  I was making $8 an hour, and I couldn’t afford payments.  But it was worth it, I thought, in the end.  I got into Harvard Law School. Read more…

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My Student Loan Story – Part I

October 30, 2008 2 comments

By some estimations, I am one of the lucky ones.  I went to some of the best schools in the country, I have a good job in a field that I may not have dreamed about but certainly respect, and I am in no danger of winding up on the streets any time soon.  Yet each month, as I write checks totalling nearly $1800 for my student loans instead of, say, repairing my broken-down car, I can’t help but wonder, “What was the point?” Read more…

Categories: Stories Tags: ,

The Trouble with Student Loans

October 30, 2008 1 comment

Over the past twenty to thirty years, a college education has become increasingly necessary to the pursuit of the American Dream.  In a Spring 2007 article in the Harvard Educational Review, Bridget Terry Long and Erin Riley note that, “on average, people with a bachelor’s degree will earn $1 million more over the course of their lifetimes than those with only a high school diploma.”  The decision to go to college seems like a no brainer.

But that decision isn’t cheap.  As Long and Riley report, for the 2006-2007 school year, the average total cost at a public 4-year University was $12,796 per year.  For private schools, that figure is even higher – an astounding, $37,367 per year.  These mounting costs mean that many students are forced to take out student loans if they want to go to college, and the debt they take on often has major ramifications in the choices they have later. 

A June 5, 2008 article in the Boston Globe noted that the average debt load is now $20,000 for undergraduate students and $45,000 for graduate students.  The authors talk about the impact of such debt on life choices:

The high costs of carrying student loans echo through dozens of life-shaping decisions. Big student loans? Don’t become a public school teacher, a firefighter, or a police officer – the pay is too low. Better not go into business for yourself – too risky when you have big loan payments every month. Don’t apply to graduate school – just more debt. And don’t even think of moving back to Iowa or Oklahoma – pay scales aren’t high enough to support debt payments. Today’s students talk about delaying marriage, not buying a home, and working full-time when babies are born, just so they can keep paying those student loans.

These are the stories that I want to tell, the stories of people who took on student debt in order to make better lives for themselves and are now faced with the painful choice of giving up their dreams or living with drastically lower standards of living than they were led to expect when they decided to pursue their educational goals.

These are the idealists, the artists, the dreamers, the entrepreneurs who weren’t.  These are the students whose parents couldn’t or wouldn’t pay for college but who chose it anyway because they believed in the American Dream.  They do not always get much sympathy.  They are told, “You didn’t have to go to such and such college,” “You didn’t have to try to become a fill-in-the-blank,” in short, “You didn’t have to have dreams.”  These are the students who didn’t settle for the hand they were dealt because they believed fully in the myth of equal opportunity.  And now they are paying the price.  These are their stories.

Categories: The Problem Tags: ,